Fed's use of balance sheet policies comes at a cost: George

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Fed's use of balance sheet policies comes at a cost: George
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The U.S. Federal Reserve's reliance on maintaining an ample balance sheet t...

WASHINGTON - The U.S. Federal Reserve’s reliance on maintaining an ample balance sheet to help the economy poses risks to financial stability and the central bank’s independence, Kansas City Fed Bank President Esther George said on Friday.

“It remains less than clear to me that the longer-run costs of balance sheet policies have been fully taken into account,” George said in prepared remarks to the Shadow Open Market Committee economics conference in New York. George has long been a critic of the Fed’s decision to buy Treasury and mortgage-backed securities in response to the 2008 financial crisis and 2007-2009 recession.

The Fed currently has more than $4.2 trillion of assets on its balance sheet, including more than $3.8 trillion of bonds.

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